Investors secured strong returns in performance among most maturing structured products during the volatile financial environment of 2022, a new UK report reveals.
Among a total of 632 structured product maturities, no plan returned a capital loss during 2022. Of considerable note, 622 plans returned gains for investors. The remaining ten were deposit-based plans which did not expose capital to risk of loss and returned the original investment.
The 632 maturities produced an annualised return of 6.44% across an average investment term of 3.25 years – an increase of 0.24% from 2021.
The results are from the latest Structured Products Annual Performance Review produced by Lowes Financial Management, arguably the leading independent analyst of the UK retail sector. The report provides a comprehensive overview of all UK retail structured product maturities throughout the preceding calendar year. It provides an independent summary of the best and worst-performing products.
Max Darer, Investment Technician at Lowes Financial Management, explained:
“After the pandemic and two unpredictable years, many investors had hoped for a quieter, more stable period. However, 2022 proved to be anything but with the unfolding war in Ukraine, supply chain problems, a surge in inflation and the merry-go-round in Downing Street.
“Despite significant market volatility throughout 2022 market positions have been such to trigger a continued high level of autocall maturities.
“It’s particularly striking to see that 100% of capital at risk structured investments maturing in 2022 returned a gain for investors, with the average annual return being 6.87%.
“All things said and done, 2022 was another extremely positive year for the sector and those investors who took advantage of it.”
Headline Data
| All Products | Structured Product Maturities 2022 | Lowes ‘Preferred’ Plans |
| 632 | Number of product maturities | 96 |
| 622 | Number that generated positive returns | 96 |
| 10 | Number that returned capital only | 0 |
| 0 | Number that lost capital | 0 |
| 3.25 | Average duration / term (years) | 3.68 |
| Average annualised returns | ||
| 6.87% | All Capital-at-Risk Products | 8.25% |
| 9.09% | Upper quartile | 10.52% |
| 4.98% | Lower quartile | 6.52% |
| 3.42% | All Deposit Products | 4.80% |
| 4.99% | Upper quartile | 5.62% |
| 1.22% | Lower quartile | 4.22% |
| 6.44% | All Products | 7.82% |
| 8.92% | Upper quartile | 10.34% |
| 3.99% | Lower quartile | 5.52% |
Ian Lowes, MD of Lowes Financial Management, said: “Structured products produced exceptional returns for investors throughout 2022, and the fact that not even one returned a loss on capital is remarkable.
“Whilst the investment market throughout 2022 and the preceding years was very difficult, this report proves that the UK retail structured product sector continues to shine. A significant number of advisers and investors have thus far missed out on what the sector has to offer. Results like these, and those of previous years cannot be dismissed. We believe that the tide is slowly turning with more people becoming aware of the quality propositions the sector has to offer.”
Lowes Financial Management, which has frequently been recognised as amongst the best UK investment advisers in various national awards, is a market leading specialist in the structured products sector. As well as analysing the performance of all structured products and data covering more than 8,500 plans, Lowes has its own process for identifying ‘Preferred’ plans – those they view to be the best available on the market at the time of launch.
The selection of Lowes ‘Preferred’ plans has again proven to be successful. Of the 632 maturities, 96 were identified as ‘Preferred’ at the time of launch. Every single ‘Preferred’ plan matured positively, outperforming the sector and subsector averages in every instance. ‘Preferred’ plans earned an average annualised return of 7.82%, an excess of 1.38% when compared to the sector average, with an average annualised upper quartile return of 10.34% and an average lower quartile return of 5.52%.
Ian Lowes added: “We are delighted with the strong performance of our ‘Preferred’ plans. This data shows, without doubt, structured products (especially those ‘preferred’ by Lowes) are a useful addition for clients’ portfolios.
“Using investments which can offer defined returns and can help protect against falls in the market, can complement the funds and other investments in a portfolio, helping to diversify the risk return profile.”
Lowes also manages a UCITS fund of structured investments the Lowes UK Defined Strategy Fund which has outperformed its peers throughout 2022.
Access the Annual Performance Review here: https://user-fwh5guf.cld.bz/FINAL-Annual-Performance-Review-2023
